Prominent economist and Managing Director of Financial Derivatives Company Limited, Bismarck Rewane has criticized Nigeria’s approach to exporting crude oil, particularly in relation to the indigenous Dangote Refinery, stressing that the forward contract approach makes no sense.
“It doesn’t make sense for Nigeria to be exporting crude on Forward Contract and not be able to refine its own product for its own citizens and for West and Central Africa, it doesn’t make sense,” he said.
Speaking in Channels Television’s Business Morning programme, Rewane said Nigeria will be able to refine crude domestically and export refined petroleum products to West African countries, especially after the Dangote Refinery secured its first cargo deal for about six million barrels.
While harping on the importance of supplying crude to the Dangote Refinery, he continued, “This refinery is likely to be listed in the Nigerian Stock Exchange 2024-2025. By listing this $19bn to $20bn investment, it increases the market capitalization of the Nigerian Stock Market by 60 per cent.
“Not only that, the Dangote Group itself pays taxes of over N146bn a year and pays dividends to shareholders of N357bn a year,” he said.
According to the economist, “So, N146bn a year and N357bn a year taxes; It is not a capitalistic investment but it is democratising the process of shareholders just like when MTN was a private company.
“When MTN declares a dividend today, everybody in town is happy because its ownership is democratised. It is now considered to be Nigerian and that’s transformation. The same thing is happening for this kind of companies which are dominant and leaders in all industries,” he said.
Prime Business Africa reports that the world’s largest “single train” facility which is situated in Ibeju Lekki, Lagos and owned by Aliko Dangote, is expected to commence operations in December with 350,000 barrels a day.
The richest man in Africa recently told Financial Times that it was “shameful”, that Nigeria, a major oil producer for more than 50 years, could not refine its own crude in anything like sufficient quantity. He expressed optimism that his refinery could reach its capacity of 650,000 barrels a day by the end of 2024.